The Rising Popularity Among Cryptocurrency Trading In South Korea
As the price of cryptocurrencies rose dramatically at the end of 2020, financial investors around the world were paying close attention to their performance in a few important sectors. One of the nations with the most concerns regarding cryptocurrency in recent times in South Korea. The South Korean National Assembly enacted new laws in March 2020 that prepared the path for the regulation and licensing of cryptocurrencies and cryptocurrency exchanges.
Even in the middle of the COVID-19 outbreak, this step was made in acknowledgment of the exponentially expanding cryptocurrency ecosystem. The legislation was created to keep an eye on a developing business and to provide standards for anti-money laundering procedures.
Cryptocurrencies, other virtual coins, are often regarded as the most popular sorts of financial investments among South Korea's young people, who see them as a means of achieving affluence in the face of chronically rising unemployment. South Korea has a long history of being an early adopter of new technology, and the culture encourages individuals to embrace new technological advancements and possibilities. Furthermore, cryptocurrency is regarded as a stateless investment that appeals to South Korean investors apprehensive about the political atmosphere and their proximity to the North Korean danger.
Explore more about the rising of cryptocurrency trading in South Korea alone within our latest blog below.
Current statistics regarding South Korea’s cryptocurrency exchanges
South Korean traders have expressed an interest in investing in digital assets and cryptocurrency marketplaces. According to the most recent financial figures, which were updated in November 2021, roughly 40% of 1,885 workers interviewed stated that they have invested in cryptocurrencies. Surprisingly, over half of South Korean workers aged 30 to 39 claimed they have invested in cryptocurrency. Workers in their twenties came in second, accounting for around 37.1% of the total.
This information sheds light on what appears to be South Korean investor adoption of blockchain and cryptocurrency. Accepting an optimistic attitude fuelled the appeal of investing in what many South Koreans saw as the future of finance.
Nevertheless, the enthusiasm shared by South Korean digital asset traders has not gone unnoticed—it has caught the considerable interest of both criminals and authorities. As a consequence, South Korea is in the middle of a cryptocurrency crackdown aimed at improving exchange transparency, reducing illicit activity such as money laundering, and providing a layer of regulatory protection for virtual currency investors.
What Attracts South Korean citizens to cryptocurrencies?
Dynamic economic situations
The primary reason for the popularity of cryptocurrencies is the country's current economic difficulties. Despite being a reasonably large and successful economy, South Korea suffers from a young unemployment crisis. In 2020, the unemployment rate fluctuated from 7.5% to 11%, with a similar trend continuing into 2021. In the months of February, March, and April 2021, the young unemployment rate hit 10%. In May, the unemployment rate fell to 9.%, and in June, it fell even more to 8.8%.
The government introduced a scheme to encourage small and medium-sized businesses to recruit youthful people. Nevertheless, following the 2017 Bitcoin crash, cryptocurrencies emerged as a feasible path to financial stability in 2018 for young South Koreans living in a hierarchical culture with high living costs and a fiercely competitive labor market.
The common use of micropayment transactions
Another explanation for the popularity of cryptocurrencies is familiarity with micropayment transactions. South Koreans have a long history of being early adopters of technology innovation, whether it be social networks or video games. It also offers the best Internet speeds in the world and a well-developed telecommunications backbone to support mobile payment solutions. Another country where bitcoin trading is prevalent is Japan, which has a similar story.
A thriving gaming sector has accustomed South Koreans to electronic micropayments, a notion that has yet to catch on in the West. Businesses and illegal markets have sprung up around its games. While cryptocurrency-related firms have yet to experience comparable income, they may be on the verge of doing so now that the South Korean government is putting in place the necessary rules.
The third reason for cryptocurrencies' appeal is political unpredictability. North Korea, South Korea's neighbor, is classified as a "state of concern." North Korea has made tremendous progress in developing nuclear weapons, which it argues is vital to protect itself against a hypothetical US invasion. The country debuted a submarine-launched ballistic missile dubbed as "the world's most powerful weapon" in early 2021. This revelation was made during a parade led by North Korean leader Kim Jong-un, only days before Joe Biden's inauguration as US President.